Brand Equity

Thesis Statement

The concept of brand equity has been in debate for many years but it is still not known exactly what it means, how it can be measured and what does it comprise of?

Introduction

The brand equity is equity of famous brand which offers many competitive advantages to the company. The concept of brand equity has interested researchers and marketers for more than 20 years especially because of its importance to build, maintain and use trademarks to achieve strategic advantages. Brand equity, since the late 80s and early 90s has been one of the most important marketing concepts.

Discussion

Brands are the most enduring asset of a company, which lasts more than their specific products and facilities, and behind the brand there are a number of loyal customers. John (2002) points out that it is clear that brand equity grows over time through increased knowledge of the consumer and its decision. Therefore, the following basic asset of the brand equity is customer equity, so the brand management becomes central tool of marketing. On the other hand Dillon et al (2001) argues that in principle “the proprietor may modify product content and quality that they want”(p. 31). He holds opinion that it is positive, if the brand lives up to consumer expectations but is a direct detriment to the quality if expectations are not met.

Companies care for building brand equity by creating the structures of identification and brand awareness with target audience. Such recognition and identification work is multidisciplinary and depends on numerous factors related to the brand. On the contrary, brand is more than just product, and that the BE is defined from relational act between brand and consumer who acquires it. In other words, the difference between the price of a product and the value of a brand is the equity and recognizes that the consumer is willing to pay, which in turn generates additional capital for the brand.

Ambler (2007) argues that “one of the most common methods to assess the value of the brand is to calculate the difference between the price that the consumer pays for the goods of the company and the price of the product with no brand on the market, and multiply the resulting difference in the sales of the products of this company” (p. 86).

In contrast, the disadvantages of this method are obvious to find a similar product without the brand is virtually impossible. Firstly, the vast majority of the goods bear the brand of the manufacturer and second, to find two completely identical goods is also implausible. Brand equity is defined as the value that a brand brings to a product. This is an additional effect in response to a consumer brand that goes beyond the product itself and its attributes. Brand equity is not directly observable but its content cannot be grasped only through a process of perception. There are five factors that contribute to the creation of brand equity which include brand loyalty, brand awareness, perceived quality, brand associations and ...